More Information

Say goodbye to your electric utility as you know it.

A new plan by the state's Public Service Commission to radically alter the amount of control consumers have over their electricity usage — and how much they pay for it — will also dramatically transform how utilities like National Grid operate.

The initiative, which the Cuomo administration calls Reforming the Energy Vision, should also, in theory, result in lower electric bills — especially for the most savvy consumers.

Under the model being proposed by the PSC, utilities will no longer be allowed to operate as tradition-bound, stand-alone monopolies whose one job is to deliver electricity to your house.

Instead, they will be transformed into "distributed system platform providers" that will open up their electrical networks to the public to allow people to directly participate in the energy markets — and be compensated — by either reducing their electric consumption or making their own power.

The changes — expected to be introduced over the next several years — mean a whole new business model for utilities, which have essentially operated the same way for more than 100 years under the same design.

"There's really no way anyone could have envisioned the advances in technology," Ken Daly, president of National Grid's New York state operations, said Monday, speaking about the PSC's plans at an energy conference in downtown Albany. "They designed it to have electricity flow one way."

But now, as prices for solar and wind systems have dropped, and new "smart" appliances that will be able to send data back and forth to the utility have evolved, homeowners are increasingly being seen as not just customers, but as participants in the energy markets that can collectively be just as powerful as power plant owners and energy traders.

According to a study of the concept written by staff at the PSC, the utilities will design new ways to charge customers for reducing their usage during peak electric usage periods or installing solar panels or small wind turbines on their property. Currently, the state hands out one-time subsidies to encourage people to buy programmable thermostats or solar equipment. But there is no incentive to program the thermostat in conjunction with the utility or sell power to the utility when demand on the grid is highest.

"It's a huge opportunity as we move forward," Daly said. "We see it more as an opportunity than a threat."

It's unclear just how much consumers would save under this new approach, although the PSC study said that utilities like National Grid would become more "active and dynamic" participants in the wholesale markets, a move that would drive down prices for consumers.

After his talk Monday, Daly said that consumers will be able to dictate how and when they buy electricity, and at what price, like downloading music from iTunes or buying movies online today compared to going to the movies or buying albums at a record store.